SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
UNION BANKSHARES, LTD.
(Name of Registrant as Specified in Its Charter)
UNION BANKSHARES, LTD.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
April 23, 1999
TO THE STOCKHOLDERS OF UNION BANKSHARES, LTD.:
You are cordially invited to attend the 1999 Annual Meeting of
Stockholders of Union Bankshares, Ltd. (the "Company") to be held on May 27,
1999, at the Westin Hotel Tabor Center Denver, 1672 Lawrence Street, Denver,
Colorado, at 10:00 a.m., Denver Time.
The purpose of the Annual Meeting is to consider and vote upon (1) the
election of Messrs. Hall and Johnson as Class II directors; (2) ratification of
the appointment of Baird, Kurtz & Dobson as independent auditors for the current
fiscal year; and (3) such other business as may properly come before the Annual
Meeting or any adjournment(s) thereof.
Enclosed is a notice of the Annual Meeting and a Proxy Statement. You
are urged to read the Proxy Statement carefully. A proxy is also enclosed for
your convenience. Please complete, sign, date and return the proxy promptly. If
you attend the Annual Meeting, you may vote your shares personally, whether or
not you have previously submitted a proxy.
Your Board of Directors strongly supports and recommends these actions.
Accordingly, we request that you vote in favor of all proposals. We also urge
you to make plans if at all possible to attend the meeting in person. Thank you
for your consideration.
FOR THE BOARD OF DIRECTORS,
/s/ Charles R. Harrison
-----------------------------------
Charles R. Harrison
Chairman of the Board of Directors
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE AND SIGN THE
ENCLOSED PROXY, RETURNING IT PROMPTLY TO ENSURE THAT YOUR SHARES ARE VOTED. A
BUSINESS REPLY ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF YOU MAIL THIS PROXY FROM ANYWHERE IN THE UNITED STATES.
<PAGE>
April 23, 1999
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS OF UNION BANKSHARES, LTD.:
The 1999 Annual Meeting of Stockholders (the "Annual Meeting") of Union
Bankshares, Ltd., a Delaware corporation (the "Company"), will be held at the
Westin Hotel Tabor Center, Denver, 1672 Lawrence Street, Denver, Colorado, at
10:00 a.m., Denver Time, on May 27, 1999, for the following purposes:
1. To elect Bruce E. Hall and Ralph D. Johnson to serve as the
Class II directors of the Company as set forth in the attached
Proxy Statement;
2. To ratify the appointment of Baird, Kurtz & Dobson as the
Company's independent auditors for the current fiscal year; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment(s) thereof.
These matters are more fully described in the accompanying Proxy
Statement. The Board of Directors of the Company has fixed the close of business
on April 16, 1999 as the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting. The Company's stock
transfer books will not be closed and all stockholders are cordially invited to
attend the Annual Meeting. Only holders of the Company's common stock, $.01 par
value per share, at the close of business on the record date are entitled to
notice of, and to vote at, the Annual Meeting. A complete list of stockholders
entitled to vote at the Annual Meeting will be available for examination during
normal business hours by any stockholder, for purposes related to the Annual
Meeting, for a period of ten days prior to the meeting, at the Company's
principal executive offices located at 1825 Lawrence Street, Suite 444, Denver,
Colorado 80202.
You are cordially invited to attend the Annual Meeting. Whether or not
you plan to attend the Annual Meeting in person, please complete, date and sign
the accompanying proxy card and return it promptly in the enclosed envelope to
ensure that your shares, regardless of the size of your holdings, are
represented and voted in accordance with your wishes. If you choose, you may
still vote in person at the Annual Meeting even though you previously submitted
your proxy.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ Bruce E. Hall
- ----------------------------------
Bruce E. Hall, Secretary
<PAGE>
April 23, 1999
UNION BANKSHARES, LTD.
PROXY STATEMENT
SOLICITATION AND REVOCATION OF PROXIES
This statement is furnished in connection with a solicitation of proxies
by the Board of Directors of Union Bankshares, Ltd. (the "Company") for use at
the 1999 Annual Meeting of Stockholders (the "Annual Meeting") to be held on
Wednesday, May 27, 1999, at 10:00 a.m., Denver Time, at the Westin Hotel Tabor
Center, Denver, 1672 Lawrence Street, Denver, Colorado, and at any adjournment
or postponement thereof. Proxies so given may be revoked at any time before
being voted by submitting a written revocation to the Secretary of the Company,
by executing another valid proxy bearing a later date, or by attending the
meeting and voting in person.
Properly executed and dated Proxies received by 5:00 p.m. May 26, 1999
will be voted in accordance with the instructions therein. If no instructions
are given with respect to the matters to be acted upon, the shares represented
by the Proxy will be voted FOR the election of Messrs. Hall and Johnson,
nominees for director; FOR ratification of the appointment of Baird, Kurtz &
Dobson as independent auditors for the current fiscal year; and FOR approval of
all of the other proposals. The persons named in the proxies will have
discretionary authority to vote all proxies with respect to additional matters
that are properly presented for action at the Annual Meeting. The cost of
preparing, assembling, mailing, and soliciting Proxies and other related
expenses will be borne by the Company.
The Company intends to request banks, brokerage houses, custodians,
nominees, and other fiduciaries to forward copies of these proxy materials to
those persons for whom they hold shares. In addition to solicitation by mail,
certain officers and employees of the Company, who will receive no compensation
for their services other than their regular salaries, may solicit proxies in
person or by telephone. The approximate date of mailing these proxy materials is
April 23, 1999.
QUORUM AND VOTING RIGHTS
A quorum of one-third of the shares outstanding and entitled to vote is
required to vote on matters before the Annual Meeting. The holders of record of
shares of Common Stock of the Company at the close of business on April 16,
1999, the record date determined by the Board of Directors, may vote at the
Annual Meeting. On that date, the Company had outstanding and entitled to vote
2,346,514 shares of Common Stock. Each share of Common Stock is entitled to one
vote on each of the matters listed in the Notice of Annual Meeting. At the
Annual Meeting, directors of the Company will be elected by a plurality of the
shares voting in the election of directors. Thus, the director candidates, up to
the number of directors to be elected, receiving the highest number of
<PAGE>
votes will be elected. Abstentions and broker non-votes will have no effect on
the election of directors. A majority of the votes present in person or by proxy
is required to pass each other issue brought before the stockholders.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions are
counted in tabulations of the vote cast on proposals presented to the
stockholders and thus have the same effect as a negative vote, whereas broker
non-votes are not tabulated for any purpose in determining whether a proposal
has been approved.
ANNUAL REPORT
The Company is also mailing with this proxy statement its Annual Report
on Form 10-KSB for the year ended December 31, 1998 (the "10-KSB"), as filed
with the U.S. Securities and Exchange Commission (excluding exhibits), which
includes financial statements for the year ended December 31, 1998. The 10-KSB
is not a part of this Proxy Statement. The Company will furnish an additional
copy of the 10-KSB to any stockholder free of charge, and will furnish a copy of
any exhibit to the 10-KSB upon payment of the Company's reasonable expenses in
furnishing such exhibit. Interested parties may request a copy of the 10-KSB or
any exhibit thereto from the Secretary of the Company.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation establishes a classified
Board of Directors with three classes of directors. At each annual meeting of
stockholders, the successors to the class of directors whose terms expire at
that meeting are elected to serve as directors for a three-year term. At this
annual meeting, two directors are nominated for election to hold office until
the annual meeting of stockholders in 2002 or until their successors are elected
and shall qualify.
The Board of Directors has nominated Bruce E. Hall and Ralph D. Johnson
for election to the Board of Directors. Each nominee is currently a director of
the Company.
Brief statements setting forth the principal occupations of and other
information concerning the nominees appear below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NOMINEE
IDENTIFIED ABOVE.
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<PAGE>
INFORMATION REGARDING DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names, ages and titles of the
executive officers and the members of, and nominees for election to, the Board
of Directors of the Company:
<TABLE>
<CAPTION>
Term as
Director Director Director
Name and Age of Director Since Class Expires In Position
- ------------------------- --------- ---------- ----------- --------------------------------
<S> <C> <C> <C> <C>
Charles R. Harrison, 52 1985 I 2001 Chairman of the Board of
Directors and Chief Executive
Officer
Herman J. Zueck, 57 1985 III 2000 President and Director of the
Company; Chairman of the Board
of Directors and Chief Executive
Officer of Union Bank & Trust
Bruce E. Hall, 46 1989 II 2002* Vice President, Treasurer,
Secretary and Director
Jerrold B. Evans, 54 1994 III 2000 President of Union Bank & Trust
and Director
Wayne T. Biddle, 74 1993 III 2000 Director
Ralph D. Johnson, 71 1993 II 2002* Director
Harold R. Logan, Jr., 54 1998 I 2001 Nominee for Director (holds no
current position)
Richard C. Saunders, 58 1993 I 2001 Director
</TABLE>
- --------------------
* Assuming election at the Annual Meeting.
CHARLES R. HARRISON has been Chairman of the Board of Directors and
Chief Executive Officer of the Company since its founding in 1985, and was
President of the Company from its founding until December 1994. From 1979 until
June 1998, Mr. Harrison was Chairman of the Board of Directors and Chief
Executive Officer of American Securities Transfer Incorporated, a Denver-based
securities transfer agent. Mr. Harrison was Senior Vice President, Cashier and a
Director of Arvada State Bank, Arvada, Colorado, from August 1976 until February
1979. At the same time, Mr. Harrison served as the President of the Colorado
chapter of the American Institute of Banking. From 1969 until 1976, Mr. Harrison
served in roles of increasing responsibility, including Vice President and
Cashier, at Jefferson Bank & Trust in Lakewood, Colorado.
HERMAN J. ZUECK has been a Vice President, Executive Vice President or
the President of the Company and the Chairman of the Board of Directors and
Chief Executive Officer of Union Bank & Trust, a state-chartered commercial bank
located in Denver, Colorado (the "Bank"), all of the capital stock of which was
acquired in 1985 by the Company, since 1985. From 1982 to 1985, Mr. Zueck was
Chairman of the Board of Directors, Chief Executive Officer and President of
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<PAGE>
Affiliated Littleton National Bank in Littleton, Colorado, a subsidiary of
Affiliated Bankshares of Colorado, Inc. ("Affiliated"). Prior to that time,
Mr. Zueck served in officer positions of increasing seniority at two other
Affiliated bank subsidiaries, Affiliated Denver National Bank and Affiliated
Lakeside National Bank. Mr. Zueck has over 33 years of banking industry
experience.
BRUCE E. HALL has been Vice President, Treasurer, Secretary and a
Director of the Company since 1989. Mr. Hall also conducts an accounting tax
consulting practice in Denver, Colorado. From 1981 until June 1998, Mr. Hall was
President, Chief Financial Officer, Secretary and Treasurer of American
Securities Transfer. Mr. Hall is a certified public accountant.
JERROLD B. EVANS has been President of the Bank and senior loan officer
since January 1989, and was its Executive Vice President and senior loan officer
from June 1986 until December 1988. He was elected to the Board of Directors of
the Company at the 1994 Annual Meeting of Stockholders. Mr. Evans has served on
the Bank's Board of Directors since 1987 and its Loan Committee since 1986. From
1980 to 1986, Mr. Evans was Senior Vice President and senior loan officer for
the First National Bank of Englewood, Englewood, Colorado, a subsidiary of
Affiliated. From 1972 until 1980, Mr. Evans had served First National Bank of
Englewood in a variety of officer positions of increasing responsibility. Mr.
Evans has over 22 years of banking industry experience, and is a past President
of the Rocky Mountain Chapter of Robert Morris Associates, a banking industry
association.
WAYNE T. BIDDLE has been a Director of the Company since 1993 and a
director of the Bank since 1978. He also was a director and Vice Chairman of
Caza Drilling Co., a Denver-based contract drilling and exploration company from
1987 to 1994. In addition, Mr. Biddle served as a director of Associated Natural
Gas, Inc., a Denver-based company, from 1983 until 1994. Currently, Mr. Biddle
owns 51% of Taurus, Ltd., a Denver-based investment company.
RALPH D. JOHNSON has been a Director of the Company since 1993 and a
director of the Bank since 1970. Mr. Johnson was chief executive officer of
Johnson Storage & Moving, a Denver-based moving company, from 1960 until his
retirement in September 1995. Mr. Johnson is also a member of the Colorado Bar
Association.
HAROLD R. LOGAN, JR., a nominee for Director of the Company has been a
member of the Advisory Board of the Company since 1996 and is occupied as
Executive Vice President, Chief Financial Officer and Director of TransMontaigne
Oil Company, a publicly-held holding company engaged in the marketing and
distribution of petroleum products. From 1987 to 1995, Mr. Logan was Senior Vice
President of Finance and a Director of Associated Natural Gas Corporation. Mr.
Logan is also a member of numerous other trade and educational associations.
RICHARD C. SAUNDERS has been a Director of the Company since 1993 and a
director of the Bank since 1982. Mr. Saunders has been a majority partner of
Saunders Construction, a Denver-based commercial building contractor, since
1972. Mr. Saunders has over 37 years of building and construction industry
experience.
-4-
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's officers and directors and persons who are beneficial
owners of more than 10% of the Company's Common Stock ("10% beneficial owners")
are required to file reports of their holdings and transactions in the Company's
Common Stock with the SEC and to furnish the Company with copies of such
reports. Based primarily upon its review of the copies it has received and upon
written representations it has obtained from some of these persons, the Company
believes that during the fiscal year ended December 31, 1998, the Company's
officers, directors, and 10% beneficial owners have complied with all such
filing requirements except as set forth in this paragraph. Mr. Johnson, a
director of the Company, made one late Form 4 filing in 1998 with respect to a
transaction involving the exercise of 500 options held by him.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND COMMITTEES
BOARD OF DIRECTORS COMMITTEES. The Company maintains an Audit Committee
of the Board of Directors, comprised of Messrs. Biddle, Johnson (Chairman),
Logan and Saunders. The Audit Committee met two times during 1998. The Audit
Committee has the responsibility of making recommendations to the Board of
Directors concerning the engagement of the Company's independent auditors,
reviewing the overall scope and results of the annual audit, and performing such
functions as may be prescribed by the Board of Directors. The members of the
Audit Committee are elected annually by the directors. The Company maintains a
Compensation Committee of the Board of Directors, comprised of Messrs. Logan,
Johnson and Saunders (Chairman). The Compensation Committee met three times
during 1998. The Compensation Committee is authorized to review the compensation
of the officers of the Company and the Bank and to make recommendations to the
Board of Directors concerning officers' salaries, stock options and any other
forms of compensation, to review recommendations to the Board of Directors
concerning the compensation of the directors, and to perform such other
functions as the Board of Directors may direct. The members of the Compensation
Committee are elected annually by the directors. The Company does not maintain a
nominating committee.
The Board of Directors met seven times in 1998. No director attended
fewer than 75% of the total meetings of the Board of Directors and of all
committees of the Board of Directors of which such director was a member.
DIRECTOR COMPENSATION. In 1998, the Company paid its nonemployee
directors an annual retainer of $6,000 plus per meeting fees of $600 (Board of
Directors) and $300 (Committee). The Company reimburses its nonemployee
directors for their reasonable expenses incurred in attending Board of Directors
and committee meetings. The Company has increased the annual retainer for its
nonemployee directors to $7,500 plus per meeting fees of $750 (Board of
Directors) and $300 (Committee) for fiscal year 1999. Under the Company's Equity
Compensation Plan for Nonemployee Directors (the "Director Equity Plan"),
nonemployee directors may elect to receive their retainer in shares of the
Company's Common Stock, instead of cash.
In addition, the Company has adopted compensation and incentive benefit
plans to enhance its ability to continue to attract, retain, and motivate
qualified persons to serve as nonemployee directors of the Company. Under the
Nonemployee Directors' Stock Option Plan (the "Directors'
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<PAGE>
Plan"), which was approved by the Company's stockholders in December 1992,
nonemployee directors of the Company receive stock options to encourage and
provide incentives for a high level of performance. Only directors who are not
also employees of the Company or any of its subsidiaries are eligible to
participate in the Directors' Plan. The Company has four nonemployee directors.
An aggregate of 22,000 shares of Common Stock are reserved for issuance
under the Directors' Plan. Nonemployee directors are automatically granted
options to purchase 500 shares once during each fiscal year following election
to the Board of Directors. The Board of Directors or a committee consisting of
such Board of Directors members or other persons as may be appointed by the
Board of Directors will administer the Directors' Plan. The Directors' Plan is
currently administered by the Board of Directors.
Each option granted under the Directors' Plan is exercisable one year
from the date of grant and expires five years from the date of grant. The option
exercise price must be equal to 100% of the fair market value of the stock on
the date of grant of the option. The option price must be paid in cash. Options
granted pursuant to the Directors' Plan may not be exercised more than three
months after the option holder ceases to be a director of the Company, except
that in the event of the death or permanent and total disability of the option
holder, the option may be exercised by the holder or his estate, as the case may
be, for a period of up to one year after the death or permanent or total
disability. Options granted to directors under the Directors' Plan will be
treated as nonstatutory stock options under the Internal Revenue Code of 1986,
as amended.
The Directors' Plan provides that the total number of option shares
covered by such plan, the number of shares covered by each option and the
exercise price per share may be proportionately adjusted by the Board of
Directors or the Committee in the event of a stock split, reverse stock split,
stock dividend or similar capital adjustment effected without receipt of
consideration by the Company.
As of April 16, 1999, the Company has granted options that are currently
outstanding on a total of 7,500 shares of Common Stock under the Directors' Plan
at a weighted average exercise price of $9.11 per share.
The Board of Directors may amend or terminate the Directors' Plan at any
time without the approval of the stockholders; provided, however, that
stockholder approval is required for any amendment which increases the number of
shares for which options may be granted, changes the designation of the class of
persons eligible to participate or changes in any material respect the
limitations or provisions of the options subject to the Directors' Plan.
However, no action by the Board of Directors or stockholders may alter or impair
any option previously granted without the consent of the optionee.
The Director Equity Plan was approved by the Company's stockholders at
the 1994 Annual Meeting, and took effect in 1995. The Director Equity Plan
authorizes the issuance of up to 100,000 shares of Common Stock to directors of
the Company who are not also employees of the Company or any subsidiary of the
Company. The Company presently has four nonemployee directors.
-6-
<PAGE>
The Director Equity Plan is administered by the Board of Directors, and
provides that each nonemployee director will be given the option to elect to
receive his annual retainer for a particular fiscal year of the Company in
Common Stock rather than cash. The number of shares of Common Stock to be issued
to a nonemployee director making such election is equal to the then-current
annual retainer paid by the Company (currently $7,500) divided by 100% of the
fair market value of the Company's Common Stock on the first trading day of the
fiscal year. The Common Stock will be forfeited and returned to the Company,
however, if the nonemployee director does not remain a director of the Company
through the end of the fiscal year or fails to attend at least 75% of all Board
of Directors and applicable Board of Directors committee meetings held during
such year. The forfeiture of the Common Stock will occur whether the nonemployee
director ceases to be a director of the Company voluntarily or involuntarily,
except that no forfeiture will occur if the participant ceases to be a director
due to his death or disability. In addition, these forfeiture provisions will be
of no effect upon a change of control of the Company. Unless a nonemployee
director makes an election permitted under the federal income tax laws, shares
issued pursuant to the Director Equity Plan in lieu of the annual retainer will
not be taxable to the nonemployee director until the forfeiture restrictions
lapse at the end of the fiscal year. At that time, the nonemployee director will
have ordinary income equal to the fair market value of the shares on that date.
The amount that is includable in income by the nonemployee director is
deductible by the Company at the same time as the inclusion by the nonemployee
director. Common Stock issued under the Director Equity Plan in lieu of the
annual retainer is not transferable until after the forfeiture provisions lapse
other than by will or the laws of descent and distribution in the event of the
director's death or pursuant to a qualified domestic relations order as defined
by the Code, Title I of the Employee Retirement Income Security Act or the rules
thereunder.
A nonemployee director may terminate his election to receive his annual
retainer in Common Stock only upon giving the Company an irrevocable, six
months' advance notice to that effect.
The Board of Directors may from time to time alter, amend, suspend or
discontinue the Director Equity Plan, except that it may not take any action
which would adversely affect the rights and obligations with respect to Common
Stock which has been issued under the Director Equity Plan. The Board of
Directors may not, without the approval of the stockholders, (i) materially
increase the maximum number of shares of Common Stock that may be issued
pursuant to the Plan (unless necessary to effect adjustments for stock splits,
stock dividends, recapitalizations and similar events), (ii) materially increase
the benefits accruing to participants under the Director Equity Plan, or (iii)
materially modify the requirements as to eligibility for participation in the
Director Equity Plan. As of the date of this Proxy Statement, 10,975 shares have
been issued pursuant to the Director Equity Plan.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the cash compensation paid by the Company
to the Chairman and Chief Executive Officer of the Company, and the two most
highly compensated executive officers of the Company other than the Chairman and
Chief Executive Officer. The table shows compensation received during the fiscal
years ended December 31, 1996, 1997 and 1998. No other person serving as an
executive officer as of December 31, 1998 received compensation in excess of
$100,000 during fiscal 1998.
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<PAGE>
<TABLE>
<CAPTION>
Annual Compensation Long Term
----------------------------------------------- Compensation
Other -------------------------
Name and Annual Restricted Options/ All Other
Principal Position Year Salary($) Bonus($) Compensation($) Stock($) SARs(#) Compensation($)
- ------------------ ---- --------- --------- --------------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles R. Harrison 1998 131,000 --/4/ 15,574/1/ -- 52,288/2/,/9/ 11,750/3/
Chairman and Chief 1997 115,000 72,000 9,102/1/ -- 12,000/2/ 13,050/3/
Executive Officer 1996 105,000 60,000 8,998/1/ -- 7,200/2/ 11,400/3/
Herman J. Zueck 1998 236,000 --/4/ 23,927/5/ -- 56,517/2/,/9/ 21,000/8/
President 1997 221,000 96,000 21,851/5/ -- 4,000/2/ 24,250/8/
1996 210,000 --/4/ 20,383/5/ -- 35,872/2/,/6/ 22,300/8/
Bruce E. Hall 1998 141,000 60,000/4/ 9,920/1/ -- 23,944/2/,/9/ 11,750/3/
Vice-President, 1997 125,000 72,000 4,859/1/ -- 4,000/2/ 10,350/3/
Secretary, and Treasurer 1996 115,000 --/4/ 4,710/1/ -- 27,504/2/,/6/ 11,850/3/
Jerrold B. Evans 1998 108,557 --/4/ 16,257/7/ -- 6,212/2/,/9/ 9,285/3/
President 1997 103,387 20,000 16,275/7/ -- 1,200/2/ 9,048/3/
Union Bank & Trust 1996 99,220 500/4/ 15,123/7/ -- 10,160/2/,/6/ 9,617/3/
</TABLE>
- --------------------
(1) Includes amounts included in officer's gross income for personal use of a
Company car, the cost of country club and/or athletic club dues, and tax
advice provided by third parties.
(2) Represents shares underlying stock options granted in designated year. The
Company has made no SAR grants.
(3) Represents Company's contributions to officer's account in the Company's
401(k) Profit Sharing Plan.
(4) Does not reflect amounts elected by officer to be taken in the form of
options pursuant to the Company's Option Bonus Plan. See Footnotes (6) and
(9).
(5) Includes amounts included in officer's gross income for personal use of a
Company car, the cost of country club and/or athletic club dues, Board of
Directors of director fees for service as a member of the Bank's Board of
Directors, and tax advice provided by third parties.
(6) Includes 33,472, 25,104 and 8,160 shares underlying stock options received
by Messrs. Zueck, Hall and Evans, respectively, pursuant to the Company's
Option Bonus Plan.
(7) Includes amounts included in officer's gross income for an automobile
allowance, the cost of country club dues, and Board of Directors of
director fees for service as a member of the Bank's Board of Directors.
(8) Includes the Company's contributions to officer's account in the Company's
401(k) Profit Sharing Plan and matching amounts under the Company's
Deferred Compensation Plan.
(9) Includes 39,088, 52,117, 19,544 and 5,212 shares underlying stock options
received by Messrs. Harrison, Zueck, Hall and Evans, respectively, pursuant
to the Company's Option Bonus Plan.
For fiscal 1999, the Company's Board of Directors has set the salaries
of Charles R. Harrison, Herman J. Zueck and Bruce E. Hall at $148,000, $250,000,
and $158,000, respectively. Mr. Evans' salary for 1999 has been set at
$113,985.
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<PAGE>
OFFICERS' EMPLOYMENT AGREEMENTS. In December 1992, Messrs. Harrison,
Hall and Zueck each entered into five-year employment agreements with the
Company. Each of the agreements is terminable at any time by either the
Company's Board of Directors or the employed officer. The Company may terminate
the agreements at any time for cause without incurring any post-termination
obligation to the terminated officer. The agreements each provide severance
benefits in the event the officer is terminated without cause, including
severance compensation equal to the officer's salary for the balance of the term
of the agreement and a bonus for each year remaining in the term based upon past
bonuses. The Company also must pay the officer all accrued salary, vested
deferred compensation, and other benefits then due the officer. The agreements
provide for annual renewal for successive one-year periods. If the Company
elects not to renew the officer's agreement, the officer may terminate his
employment prior to the expiration of the remaining term and receive
compensation equal to that payable upon a change in control of the Company. If
the officer is terminated upon a change in control, the officer shall be paid
severance compensation equal to three times his salary at the rate in effect at
the time of termination, plus a bonus based upon past bonuses. At the election
of the officer, such severance compensation may be paid in a lump sum. The
agreements also require Messrs. Harrison and Hall to devote such time, attention
and effort to the affairs of the Company as is necessary to discharge their
duties as Chairman of the Board of Directors and Chief Executive Officer, and
Vice President, Treasurer and Secretary, respectively. Mr. Zueck's agreement
requires that he devote all of his business time to the Company, except for
limited time and services for the management of his personal investments, or
except with the prior consent of the Company. Each of Messrs. Harrison, Hall and
Zueck is prohibited from competing with the Company or its subsidiaries for a
period of two years following his voluntary termination of the agreement, but is
not prohibited from competing with the Company in the event he is terminated
without cause or upon a change in control. The agreements each include
provisions for the increase of the officer's salary, performance bonuses,
reimbursement for financial and tax planning, an automobile allowance,
participation in the Company's benefit plans and disability benefits.
OPTION GRANTS. The following table sets forth information concerning the
grants of stock options made during fiscal year 1998 to the Company's Chief
Executive Officer and the three other most highly compensated executive officers
of the Company whose compensation exceeded $100,000 during fiscal year 1998:
-9-
<PAGE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR (1)
Individual Grants
-----------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date
- ---------------------- -------------- -------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Charles R. Harrison 13,200/2/ 7.6% 11.375 1/20/09
39,088/3/ 22.6% 11.375 1/20/09
Herman J. Zueck 4,400/2/ 2.5% 11.375 1/20/09
52,117/3/ 30.2% 11.375 1/20/09
Bruce E. Hall 4,400/2/ 2.5% 11.375 1/20/09
19,544/3/ 11.3% 11.375 1/20/09
Jerrold B. Evans 1,000/2/ .6% 11.375 1/20/09
5,212/3/ 3.0% 11.375 1/20/09
</TABLE>
- -----------------------
(1) The Company has made no SAR grants.
(2) Consists of options vesting in equal increments over a 3-year schedule from
1999-2001.
(3) Consists of options acquired pursuant to the Company's Option Bonus Plan
which vest six months from the date of grant.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTIONS/SAR VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ------------------- ---------------- ------------------ ---------------- ------------------
<S> <C> <C> <C> <C>
Charles R. Harrison -- -- 179,600/51,888 1,263,050/56,874
Herman J. Zueck -- -- 97,006/56,383 613,526/62,932
Bruce E. Hall -- -- 88,638/23,810 572,732/26,287
Jerrold B. Evans -- -- 30,293/6,279 203,880/6,914
</TABLE>
INDEMNIFICATION AND LIABILITY INSURANCE
The Company's Certificate of Incorporation and Bylaws provide that the
Company shall indemnify all directors and officers of the Company to the fullest
extent now or hereafter permitted by the Delaware General Corporation Law. Under
such provisions any director or officer, who in his capacity as such, is made or
threatened to be made, a party to any suit or proceeding, shall be indemnified
if such director or officer acted in good faith and in a manner he reasonably
believed
-10-
<PAGE>
to be in or not opposed to the best interests of the Company and, with
respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful.
There is no pending litigation or proceeding involving a director,
officer, employee or other agent of the Company as to which indemnification is
being sought. The Company is not aware of any other threatened litigation that
may result in claims for indemnification by any director, officer, employee or
other agent.
The Company has purchased a directors and officers insurance policy
providing not less than a $3.0 million coverage limit in the aggregate per year.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of April 16,
1999, regarding beneficial ownership of the Company's Common Stock: (i) by each
person who owns of record (or is known by the Company to own beneficially) more
than 5% of the Common Stock or as to which he has the right to acquire within 60
days of April 16, 1999; (ii) by each director and named executive officer of the
Company; and (iii) by all directors and executive officers as a group. Except as
otherwise indicated, the Company believes that the beneficial owners of the
Common Stock listed below, based on information furnished by such owners, have
sole investment and voting power with respect to such shares.
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Common Stock
- ------------------------------------ ----------------- ------------------
<S> <C> <C>
Charles R. Harrison(1) 779,338 25.6%
1825 Lawrence Street, Suite 444
Denver, CO 80202
Herman J. Zueck(2) 229,932 7.6%
100 Broadway
Denver, CO 80203
Bruce E. Hall(3) 290,481 9.6%
1825 Lawrence Street, Suite 444
Denver, CO 80202
Jerrold B. Evans(4) 57,127 1.9%
1825 Lawrence Street, Suite 444
Denver, CO 80202
Wayne T. Biddle(5) 38,497 1.3%
1825 Lawrence Street, Suite 444
Denver, CO 80202
Ralph D. Johnson(6) 92,049 3.0%
1825 Lawrence Street, Suite 444
Denver, CO 80202
Harold R. Logan, Jr.(7) 6,025 0.2%
1825 Lawrence Street, Suite 444
Denver, CO 80202
</TABLE>
-11-
<PAGE>
<TABLE>
<CAPTION>
Number of Percentage of
Name and Address Shares Common Stock
- ------------------------------------ ----------------- ------------------
<S> <C> <C>
Richard C. Saunders(8) 75,497 2.5%
1825 Lawrence Street, Suite 444
Denver, CO 80202
All officers and directors as a 1,568,946 51.6%
group (7 persons)(9)
</TABLE>
- --------------------
(1) Includes 179,600 shares issuable upon exercise of options which are
exercisable within 60 days. Does not include an additional 51,888 options
which will vest in the next two years.
(2) Includes 97,006 shares issuable upon exercise of options which are
exercisable within 60 days. Does not include an additional 56,383 options
which will vest in the next two years.
(3) Includes 88,638 shares issuable upon exercise of options which are
exercisable within 60 days. Does not include an additional 23,810 options
which will vest in the next two years.
(4) Includes 30,293 shares issuable upon exercise of options which are
exercisable within 60 days. Does not include an additional 6,279 option
shares which will vest in the next two years.
(5) Includes 1,000 shares issuable upon exercise of outstanding options. Does
not include an additional 500 options which will vest in one year.
(6) Includes 2,000 shares issuable upon exercise of outstanding options. Does
not include an additional 500 options which will vest in one year.
(7) Does not include 500 options which will vest in one year.
(8) Includes 2,000 shares issuable upon exercise of outstanding options. Does
not include an additional 500 options which will vest in one year.
(9) Includes 400,537 shares issuable upon exercise of options which are
exercisable within 60 days as set forth in footnotes (1)-(8) above.
SHAREHOLDERS' AGREEMENTS
Pursuant to a Shareholders' Agreement among Charles R. Harrison, Herman
J. Zueck, Bruce E. Hall, Wayne T. Biddle, Jerrold B. Evans, Lloyd E. Hayne,
Ralph D. Johnson, Richard C. Saunders and C. Gale Sellens (collectively, the
"Shareholders," and individually, a "Shareholder") and the Company dated
December 31, 1993 (the "Shareholders' Agreement"), the Shareholders agreed to
certain restrictions upon the transfer of shares of the Company's Common Stock
owned by any of the Shareholders ("Shares"). Among other things, the
Shareholders' Agreement provides that any member of the Bank Director Group (as
defined by the Shareholders' Agreement) wishing to transfer any or all of the
Shares owned by him must, except in the case of certain transfers, give notice
of such intent to the Company, the Management Group (as defined by the
Shareholders' Agreement) and the other members of the Bank Director Group, and
that the members of the Management Group and the other members of the Bank
Director Group have rights of first refusal with respect to such Shares.
Under the Shareholders' Agreement, a member of the Management Group
wishing to transfer any or all of the Shares owned by him must, except in the
case of certain transfers, give
-12-
<PAGE>
notice of such intent to the Company and the other members of the Management
Group, and the other members of the Management Group have rights of first
refusal with respect to such Shares.
On January 25, 1995, the Shareholders' Agreement was amended to modify
the definition of "Shares" to include any transferable options, warrants or
other rights to purchase Common Stock of the Company that were owned by the
Shareholders as of December 31, 1992, to provide that, if the other members of
the Management Group so agree, a member of the Management Group may dispose of
his Shares without offering the Shares to the other Shareholders, and to extend
the right of first refusal to purchase Shares offered by a member of the
Management Group to members of the Bank Director Group.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CREDIT TRANSACTIONS
The officers, directors and principal stockholders of the Company and
the Bank, and members of their immediate families and businesses in which these
individuals hold controlling interests, are customers of the Bank and it is
anticipated that such parties will continue to be customers of the Bank in the
future. Credit transactions with these parties are subject to review by the
Bank's Board of Directors. All outstanding loans and extensions of credit by the
Bank to these parties were made in the ordinary course of business on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons, and (in
the opinion of management) did not involve more than the normal risk of
collectibility or present other unfavorable features. At December 31, 1998, the
balance of the Bank's loans and advances under existing lines of credit to these
parties was approximately $3,408,000 or 2.3% of the Bank's total loans.
CERTAIN RELATIONSHIPS
Mr. Zueck is a director, treasurer, and beneficial owner of 7.4% of the
mortgage company with which the Bank conducts business.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Action is being taken by the Stockholders at the Annual Meeting with
respect to the ratification of the selection by the Company's Board of Directors
of Baird, Kurtz & Dobson to be independent auditors of the Company for the
current fiscal year. The Board of Directors has selected Baird, Kurtz & Dobson
as the independent certified public accountants to audit the Company's financial
statements for the fiscal year ending December 31, 1998. Baird, Kurtz & Dobson
does not have and has not had at any time any direct or indirect financial
interest in the Company and does not have and has not had at any time any
connection with the Company in the capacity of promoter, underwriter, voting
trustee, director, officer or employee. Neither the
-13-
<PAGE>
Company, nor any officer, director, or associate of the Company, has any
interest in Baird, Kurtz & Dobson.
A representative of Baird, Kurtz & Dobson will be present at the Annual
Meeting and will have the opportunity to make a statement if he or she so
desires and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR AND IN FAVOR OF THE
RATIFICATION OF SUCH APPOINTMENT.
OTHER MATTERS
The Company knows of no business which will be presented for
consideration at the Annual Meeting other than that described above. However, if
any other business should come before the Annual Meeting, it is the intention of
the persons named in the enclosed form of Proxy to vote the Proxies in respect
of any such business in accordance with their best judgment.
PROPOSALS FOR 1999 ANNUAL MEETING
Stockholders who intend to present proposals at the 1999 annual meeting,
which the Company currently expects to hold in May 1999, must deliver them to
the Company at its principal executive offices at least 150 days prior to the
meeting or by December 23, 1999, whichever is earlier, for inclusion in the
proxy statement and form of proxy relating to that meeting. All proposals must
comply with the applicable requirements of the federal securities laws and the
Company's Bylaws.
-14-
<PAGE>
PROXY
UNION BANKSHARES, LTD.
1825 LAWRENCE STREET
SUITE 444
DENVER, COLORADO 80202
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Charles R. Harrison, Bruce E. Hall and
Herman J. Zueck, and each of them, as Proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent, and to vote as
designated on the reverse side, all the shares of Common Stock of Union
Bankshares, Ltd. held of record by the undersigned on April 16, 1999 at the
Annual Meeting of Stockholders to be held on May 27, 1999 or any adjournment
thereof upon the following matters, as set forth in the Notice of said Meeting
and Proxy Statement, dated April 23, 1999, copies of which have been received by
the undersigned.
The election of the director-nominees below, and the ratification of the
appointment of Baird, Kurtz & Dobson as independent auditors of the Company are
proposed by the Company.
1. ELECTION OF DIRECTORS:
|_| FOR the nominees listed below (except as marked to the contrary
below)
|_| WITHHOLD AUTHORITY to vote for the nominees listed below
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE
"FOR" BOX ABOVE AND STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE
LIST BELOW.)
Bruce E. Hall and Ralph D. Johnson
2. Proposal to ratify the appointment of Baird, Kurtz & Dobson as
independent auditors of the Company.
|_| FOR |_| AGAINST |_| ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
matters as may be incidental to the conduct of the meeting.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR AND FOR THE RATIFICATION OF
THE APPOINTMENT OF INDEPENDENT AUDITORS OF THE COMPANY.
MARK HERE |_|
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
Please sign exactly as your name appears on
this proxy. If the shares represented by
this proxy are held by joint tenants, both
must sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such.
If stockholder is a corporation, please
sign in full corporate name by President or
other authorized officer. If stock holder
is a partnership, please sign in
partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND Signature:_____________________ Date_______
RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED
POSTAGE PRE-PAID ENVELOPE. Signature:_____________________ Date_______
